Michael Phelps has been suspended from competition for three months by USA Swimming in the latest fallout from a photo that showed the Olympic great inhaling from a marijuana pipe.

The sport's US governing body also cut off its financial support to Phelps for the same three-month period, effective Thursday.

"This is not a situation where any anti-doping rule was violated, but we decided to send a strong message to Michael because he disappointed so many people, particularly the hundreds of thousands of USA Swimming member kids who look up to him as a role model and a hero," the federation said in a statement.

"Michael has voluntarily accepted this reprimand and has committed to earn back our trust."

Bad news

Phelps won a record eight gold medals in Beijing to become one of the world's most acclaimed athletes. Now he's enduring a wave of bad news in the wake of the photo, published Sunday by the News of the World, an English newspaper.

Earlier Thursday, cereal and snack maker Kelloggs announced it wouldn't renew its sponsorship contract with Phelps, saying his behaviour is "not consistent with the image of Kellogg".

The swimmer appeared on the company's cereal boxes after his Olympic triumph.

USA Swimming provides a $1,750 monthly stipend to national team members to help defray travel and training expenses, plus performance bonuses. However, it's a small percentage of the millions Phelps makes through endorsements.

"Michael accepts these decisions and understands their point of view," said one of his agents, Drew Johnson. "He feels bad he let anyone down. He's also encouraged by the thousands of comments he's received from his fans and the support from his many sponsors. He intends to work hard to regain everyone's trust."